Income Tax Return for AY 2022-2023: Avoid flat 30% tax on cryptocurrency income till now – here’s how
The new crypto tax rule would apply from Assessment Year 2023-2024. That means your income from crypto in Financial Year 2022-23 would be taxed at the rate of 30% (plus cess and surcharges).
How to avoid flat 30% tax on income from cryptocurrency? After the announcement of proposed 30 percent tax rule on income from cryptocurrencies and other virtual digital assets (VDAs) in Budget 2022, this may be the biggest question on the minds of crypto investors and traders.
The new crypto tax rule would apply from Assessment Year 2023-2024. That means your income from crypto in Financial Year 2022-23 would be taxed at the rate of 30% (plus cess and surcharges).
How to avoid flat 30% tax?
For income in the current financial year (till 31st March 2022), 30% tax rule will not apply. So if you sell your crypto holdings till March 31 and book profit, this income will be taxed as per existing rules in Assessment Year 2022-2023.
Tax rule for crypto income till March 31, 2022
According to Revenue Secretary Tarun Bajaj, crypto investors can show their income under some head in ITR and the Assessing Officer would do the assessment for them for transactions before April 1.
“For transactions before April 1 you will show in some head in your ITR and the Assessing Officer will do an assessment for you,” Bajaj was recently quoted as saying by news agency PTI.
“The Assessing Officer will take a call on what head crypto gains should be charged,” Bajaj further said. (Read his full statement here)
While how much tax one would be required to pay before March 31 on income from crypto would vary from case to case basis, it is certain that investors won’t have to pay flat 30% tax. This may be particularly beneficial for small crypto investors, should they want to book profit and avoid flat 30% tax.
From July 2022, the 1% TDS rule for crypto transfers would also come in force. This will make it easy for the tax department to track crypto transactions.
The Budget 2022 proposed to introduce section 115BBH which provides that any income from transfer of any virtual digital asset shall be taxed at the rate of 30% and no deduction would be allowed for any expenditure or set-off of losses.
Source:financialexpress.com